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Intel said it had cancelled a Xeon processor that was scheduled
to be released in 2007 and would replace it with another that
improves communication with other chips in the system. The new
chip, code-named Tigerton, is set to be released in 2007.

"We have the opportunity to deliver better performance in 2007,"
Intel spokeswoman Erica Fields said on Monday. "Therefore, we are
cancelling a product and replacing it with something else."

The change comes as Intel is being pressured by AMD's server
processors which incorporate more efficient chip-to-chip
communication. AMD has seen its share of the server market grow as
its chips have generally outperformed Intel's offerings.

Fields declined to provide specifics on the new dedicated,
high-speed "interconnect" that would be part of Tigerton or
describe how it differed from what is being offered by AMD's
Opteron processor.

"We're not providing those details at this time," she said.

Intel also announced that it was delaying the high-volume
release of an update to its Itanium chip for high-end servers. That
chip, code-named Montecito, would be shipped in volume in the
middle of next year rather than early 2006, Fields said.

Itanium was developed over a decade by Intel and
Hewlett-Packard, but its sales have never matched expectations.
Both companies, however, have remained committed to it.

The Montecito update will be the first Itanium to incorporate
two computer engines on a single core. The company said it expected
the chip would offer twice the performance of today's Itanium 2
processors.

"In order for us to deliver the highest-quality production
parts, we need some additional time," Fields said.